Report: SCF broke law to prop up failing program

State College of Florida in Bradenton

Staff Photo by Thomas Bender

By CHRISTOPHER O'DONNELL

Published: Thursday, November 15, 2012 at 1:00 a.m.

Last Modified: Wednesday, November 14, 2012 at 6:03 p.m.

BRADENTON - Despite repeated warnings from their staff, top officials at State College of Florida broke state law by using $470,000 of college money to prop up a failing job training program during the past two years, a report finds.

Facts

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Facts

SCF LOSSES

State College of Florida officials broke state law by using college funds to subsidize a shortfall in their work force education program, according to a report by local certified public accounting firm Kerkering, Barberio and Co.

Here is a look at how much the program that should have been fully funded through fees lost:

2010-11: Deficit -- $208,192

2011-12: Deficit -- $262,759

A report by a local accounting firm shows that SCF dipped into operating funds that included student tuition and state funding to make up a shortfall in its Continuing Workforce Education program in 2011, the same year the college raised tuition for regular students by 8 percent.

The program was still hemorrhaging money one year later when the college used profits from its bookstore and merchandize sales to bail it out.

The college has not been cited by auditors, but for trustees who recently forced President Lars Hafner to resign, the report is yet more evidence of poor fiscal management.

SCF emails show that Hafner and Jack Crocker, vice president for academic quality and success, received several warnings that the college was violating state law.

“These are the kinds of things that should not happen, not at any institution,” said Board of Trustees Chairman Carlos Beruff.

Trustees requested the audit as they were building a case to fire Hafner, but it was not made public until after Hafner resigned with a $363,000 severance package.

SCF leaders say the program's shortfall was the result of the lackluster economy and a change in the law that required training courses be fully funded through fees.

College leaders have scaled down the program and reduced staffing costs so that the program is now covering costs.

Crocker, who is the college's acting president, defended moving money into the struggling program, saying it makes no sense that courses for students seeking two- and four-year degrees are subsidized by the state while work force education classes that help people find jobs or advance their careers are not.

He added that the college wanted to avoid cutting a program that he said is in keeping with Gov. Rick Scott's push for higher education to better prepare students for jobs.

“We took Gov. Scott's emphasis on jobs very seriously and felt we needed to make every effort to offer training for businesses in our region,” he said.

SCF's work force education is intended to give local companies an affordable way to train and certify their employees and also to give low-cost training to people starting up small businesses.

It includes courses like bookkeeping, computer studies and wedding and event planning.

Local companies that use SCF include Sysco, Tidewell Hospice and Tervis Tumbler.

Until recently, the fees that companies or students paid needed only to cover 50 percent of the cost of the classes.

But with state funding for colleges being cut, lawmakers in 2010 raised that to 100 percent.

That coincided with many companies slashing training budgets as a result of the prolonged economic downturn, a double whammy for the program.

The program's revenue fell from $619,000 in 2010 to $148,000 just two years later.

“The law changed and demand plummeted,” said Carol Probstfeld, SCF vice president for business services.

But college emails show SCF was slow to respond to the growing deficit.

“We definitely need to get this in order for next year as there might be some leniency in the first year but probably not repeat years,” Probstfeld wrote in a June 2011 email to Crocker.

The 2010-11 shortfall of $208,000 was made up from SCF's operating fund, Probstfeld said.

More than a year later, the college was no closer to fixing the problem and the overall deficit for both years had ballooned to close to $400,000.

“This is a very serious issue! Almost $400K. Action must be taken soon before we dig an insurmountable deficit for this year!” Probstfeld wrote to Hafner and Crocker in August.

The following year, the college transferred almost $263,000 from SCF's auxiliary fund to offset losses.

The report produced by Sarasota accounting firm Kerkering, Barberio and Co. was sent to trustees just days before they approved a settlement agreement with Hafner in exchange for his immediate resignation.

In an apparent effort to build a stronger case against Hafner, it includes a time line documenting college discussions about the problem.

Beruff said the report shows that college leaders knew SCF was violating the law but failed to take steps to remedy the situation.

“My concern was strictly one that confirms the leadership of the college,” he said. “You don't just ignore it for 18 months.”

Hafner's critics on the board, including Beruff, already had made it clear they wanted to fire him. They claimed he had misled previous boards about the cost of key projects, including a charter school and the school's new women's tennis program.

They also reported him to the state for copying a former board chairman's signature on several college documents. An investigation by the Florida Department of Law Enforcement cleared Hafner of criminal forgery.

The report shows that the changes SCF made to reduce staff have stemmed the program's losses. As of the end of September, it reported a surplus of $42,000.

“We've been able maintain it and we will certainly be monitoring it and hope that when the economy comes back, so will the training dollars,” Crocker said.

<p><em>BRADENTON</em> - Despite repeated warnings from their staff, top officials at State College of Florida broke state law by using $470,000 of college money to prop up a failing job training program during the past two years, a report finds.</p><div class="art_item art_item_inset art_item_facts">
<h3>Facts</h3>
<h4>SCF LOSSES</h4>
<p>State College of Florida officials broke state law by using college funds to subsidize a shortfall in their work force education program, according to a report by local certified public accounting firm Kerkering, Barberio and Co.<br><br>Here is a look at how much the program that should have been fully funded through fees lost:<br><br><b>2010-11: Deficit -- $208,192<br><br>2011-12: Deficit -- $262,759</b></p>
</div>
<p><A HREF="https://www.documentcloud.org/documents/516284-report-on-state-college-of-florida-by-kerkering.html" target="_blank">A report by a local accounting firm</a> shows that SCF dipped into operating funds that included student tuition and state funding to make up a shortfall in its Continuing Workforce Education program in 2011, the same year the college raised tuition for regular students by 8 percent.</p><p>The program was still hemorrhaging money one year later when the college used profits from its bookstore and merchandize sales to bail it out.</p><p>The college has not been cited by auditors, but for trustees who recently forced President Lars Hafner to resign, the report is yet more evidence of poor fiscal management.</p><p>SCF emails show that Hafner and Jack Crocker, vice president for academic quality and success, received several warnings that the college was violating state law.</p><p>“These are the kinds of things that should not happen, not at any institution,” said Board of Trustees Chairman Carlos Beruff.</p><p>Trustees requested the audit as they were building a case to fire Hafner, but it was not made public until after Hafner resigned with a $363,000 severance package.</p><p>SCF leaders say the program's shortfall was the result of the lackluster economy and a change in the law that required training courses be fully funded through fees.</p><p>College leaders have scaled down the program and reduced staffing costs so that the program is now covering costs.</p><p>Crocker, who is the college's acting president, defended moving money into the struggling program, saying it makes no sense that courses for students seeking two- and four-year degrees are subsidized by the state while work force education classes that help people find jobs or advance their careers are not.</p><p>He added that the college wanted to avoid cutting a program that he said is in keeping with Gov. Rick Scott's push for higher education to better prepare students for jobs.</p><p>“We took Gov. Scott's emphasis on jobs very seriously and felt we needed to make every effort to offer training for businesses in our region,” he said.</p><p>SCF's work force education is intended to give local companies an affordable way to train and certify their employees and also to give low-cost training to people starting up small businesses.</p><p>It includes courses like bookkeeping, computer studies and wedding and event planning.</p><p>Local companies that use SCF include Sysco, Tidewell Hospice and Tervis Tumbler.</p><p>Until recently, the fees that companies or students paid needed only to cover 50 percent of the cost of the classes.</p><p>But with state funding for colleges being cut, lawmakers in 2010 raised that to 100 percent.</p><p>That coincided with many companies slashing training budgets as a result of the prolonged economic downturn, a double whammy for the program.</p><p>The program's revenue fell from $619,000 in 2010 to $148,000 just two years later.</p><p>“The law changed and demand plummeted,” said Carol Probstfeld, SCF vice president for business services.</p><p>But college emails show SCF was slow to respond to the growing deficit.</p><p>“We definitely need to get this in order for next year as there might be some leniency in the first year but probably not repeat years,” Probstfeld wrote in a June 2011 email to Crocker.</p><p>The 2010-11 shortfall of $208,000 was made up from SCF's operating fund, Probstfeld said.</p><p>More than a year later, the college was no closer to fixing the problem and the overall deficit for both years had ballooned to close to $400,000.</p><p>“This is a very serious issue! Almost $400K. Action must be taken soon before we dig an insurmountable deficit for this year!” Probstfeld wrote to Hafner and Crocker in August.</p><p>The following year, the college transferred almost $263,000 from SCF's auxiliary fund to offset losses.</p><p>The report produced by Sarasota accounting firm Kerkering, Barberio and Co. was sent to trustees just days before they approved a settlement agreement with Hafner in exchange for his immediate resignation.</p><p>In an apparent effort to build a stronger case against Hafner, it includes a time line documenting college discussions about the problem.</p><p>Beruff said the report shows that college leaders knew SCF was violating the law but failed to take steps to remedy the situation.</p><p>“My concern was strictly one that confirms the leadership of the college,” he said. “You don't just ignore it for 18 months.” </p><p>Hafner's critics on the board, including Beruff, already had made it clear they wanted to fire him. They claimed he had misled previous boards about the cost of key projects, including a charter school and the school's new women's tennis program.</p><p>They also reported him to the state for copying a former board chairman's signature on several college documents. An investigation by the Florida Department of Law Enforcement cleared Hafner of criminal forgery.</p><p>The report shows that the changes SCF made to reduce staff have stemmed the program's losses. As of the end of September, it reported a surplus of $42,000.</p><p>“We've been able maintain it and we will certainly be monitoring it and hope that when the economy comes back, so will the training dollars,” Crocker said.</p>